Divided We Stand

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The marriage is over, and the separation is in full swing. But this break-up isn’t a sad affair; in fact, it’s quite the contrary. The separation of Cadbury Schweppes plc into two separate companies – one that focuses solely on beverages and another that focuses on Cadbury’s chocolate and confectioneries – is expected to be extremely beneficial for both sides, allowing each to concentrate more fully on what they do best. “There was ultimately a lot of feeling that the two companies separating would make each one stronger,” says Andy Bayfield, vice-president of Canada Dry Mott’s Inc., the Canadian division of the new beverage company.

The U.K.-based Cadbury Group Ltd., a confectionery company, originally merged with beverage company Schweppes Ltd. in 1969 to create Cadbury Schweppes plc. But after selling off the European beverage division of the company in 2006, in 2008 the decision was made to separate the North American beverage component of the company, resulting in a new North American company now known as the Dr Pepper Snapple Group, Inc., based in Plano, Tex. Its listing on the New York Stock Exchange in May 2008 officially kicked off its separation from Cadbury Schweppes, which is now simply known as Cadbury plc. The Canadian division of Dr Pepper Snapple (headquartered in Mississauga, Ont., but with staff across the country) is now called Canada Dry Mott’s, while the Mexican division will be known as Grupo Peñafiel.

The Canadian name for the arm of the Dr Pepper Snapple Group is based on the fact that Mott’s Clamato and Canada Dry Ginger Ale are two distinctively Canadian beverages that mean a lot to Canucks. “The Caesar is a Canadian invention,” points out Bayfield, referring to the popular alcoholic drink that’s similar to a Bloody Mary, but which uses Clamato as its base. He also adds that, “ginger ale is definitely more popular in Canada than the U.S.” Dr Pepper, Crush, Mott’s Fruitsations, Schweppes, Orangina and Mott’s Garden Cocktail are among the other carbonated soft drinks, mixers, juices, apple sauce, water, ready-to-drink teas and other premium beverages that are part of the Canadian division’s portfolio. The Canadian operations are primarily sales, marketing and distribution, with most of the manufacturing done in Plano, Tex.

As vice-president of Canada Dry Mott’s, Bayfield is excited about the changes now underway. He sees this as essentially the creation of a whole new company with its own new corporate culture, and says the approximately 80 employees across Canada feel the same. “We really are going to create our own culture as a company, and be in control of our own destiny,” he says, noting that the redefinition of their culture is going well so far, but it’s still a work in progress. “When the team asks, ‘What are we going to be?’ I say, ‘You’ll decide that, I won’t.’” And, he adds, everyone feels “pretty energized about it – it’s not every day that you get to be a part of a company on its first day.”

That said, the company will be continuing on the same path that has kept its beverage brands rising in popularity in recent years (since 2006, their total share in juice and carbonated soft drinks sales in Canada rose from 7.8 per cent to 8.3 per cent). That path includes a lot of innovation aimed at meeting consumer needs and desires. “We see where consumers are heading and try to be there as well,” says Bayfield. One major area they’re continuing to work on is the “better for you” market, noting that customers are no longer just looking to be refreshed; they want their drinks to be “functional” and healthy as well. This means either adding benefits, such as vitamins, protein and antioxidants, or removing or reducing unhealthy elements, including sodium or sugar. Some recent examples from the company include a low-sodium version of Mott’s Garden Cocktail, launched last year; a new Mott’s Fruitsations apple sauce with added calcium and antioxidants, launched this July; and the new Canada Dry Green Tea Ginger Ale, which boasts that it is “enhanced with 200 mg of antioxidants.” The latter was just launched in March and is doing extremely well so far, according to Bayfield.

At the same time, Canada Dry Mott’s recognizes that people still want to indulge, so the company will also continue focusing on new ways to present the classic treats. For instance, they’ve done a series of Dr Pepper “in-outs” – special beverages available for a limited time only, typically eight to 12 weeks – based on soda fountain classic flavours of the 1950s, like cherry vanilla. The idea behind these was to draw the customer in, hopefully enticing them to revisit the original Dr Pepper at the same time. Other fairly recent additions to the company’s product lineup have included a variety of single-serve apple sauce and juice products, meeting the consumer need for convenience.

When he talks about “innovation,” Bayfield doesn’t just mean developing new products. He’s also talking about new ways to market older products. For example, research showed that the vegetable juice beverage Mott’s Garden Cocktail hadn’t been showing much growth in recent years, despite the fact that its nutritious nature should make it an ideal choice for health-conscious consumers. The result was the decision to put more focus on the marketing of this product. “We’re putting our investments behind the brands that meet consumer needs,” explains Bayfield, noting that the new low-sodium Garden Cocktail is part of this strategy, and adding, “We’re also putting a lot of emphasis on really getting quality consumer insights.” This increased focus on consumer research will help with advertising and marketing campaigns as well, as it did with the recent Clamato campaign, “When you see one, you want one,” a slogan that was born out of consumer research revealing that when one person in a group orders a Caesar, others decide they want one too.

In all, the future looks bright for the Dr Pepper Snapple Group and Canada Dry Mott’s, as the company continues on its path of marketing and developing products that satisfy consumers’ varied desires for indulgence, convenience, healthfulness and “functionality” – the latter of which Bayfield believes to be the current leading growth area. “We have a very diverse portfolio that meets a variety of consumer needs,” he says. “We’ll continue to look for innovations that are going to meet these needs.”